Upload
vidal
View
40
Download
8
Tags:
Embed Size (px)
DESCRIPTION
INTERNAL AUDIT : THE NEGLECTED ELEMENT IN THE GOVERNANCE AND FINANCIAL REFORM PROGRAMME : THE CASE OF GHANA. ATO GHARTEY. OUTLINE. INTRODUCTION WHAT ? WHY ? HOW ? APPRAISAL NEXT STEPS CONCLUSION. INTRODUCTION. - PowerPoint PPT Presentation
Citation preview
ATO GHARTEY
OUTLINEINTRODUCTION
WHAT ?
WHY ?
HOW ?
APPRAISAL
NEXT STEPS
CONCLUSION
INTRODUCTION
Present internal audit within the broader framework of governance and financial management reform.
Indicate what it did or it not do and the implication of the action or inaction.
WHAT DO WE WANT?
PUBLIC FINANCIAL MANAGEMENT REFORM
FOR GOOD GOVERNANCE AND
POVERTY REDUCTION
UNDER
DEVELOPMENT
POVERTY
WHY THE NEED FOR CHANGE
GOOD GOVERNANCE
INTERNATIONAL COMMUNITY
CIVIL STRIFE
SOCIALAWARENESS
BYPEOPLE
HOW ?PREVIOUS ATTEMPTED
SOLUTIONS
ONGOING REFORMS
SOME REFLECTIONS
REALIGNED STATEGY
Structural Adjustment
Institutional Support (SAIS)
Capital Budget: Public Investment Programming
Recurrent Budget:
Budget Task Force Budget Improvement Working
Group (BIWIG
Civil Service Reform Programme
Integrated Personnel and
Payroll Database System (IPPD
National Revenue Secretariat
Economic Management Support
Debt Recording and Management System
Financial Sector Adjustment Credit (FINSAC).
Public Expenditure Reviews
Expenditure Tracking and Control System (EXTRACON, 1993-95)
National Institutional Renewal Programme (NIRP).
Policy Guided Budget earnings
Special Recruitment Privatization and
Divestiture
Public Financial Management Reform
Programme (PUFMARP 1996)
PREVIOUS ATTEMPTED SOLUTIONS
Etc.
Etc.
ONGOING REFORMS
The Civil Service Performance Improvement Programme (CSPIP)
Governance and Public Financial Mgt Reform
Decentralization and Local Govt
Public Sector Incomes Policy and Administration
The National Policy Process and Cabinet Process Reforms
Legal Sector Reforms
State-owned Enterprises Reforms
The Gateway Project
Central Management Agencies (CMAs)
Other Reforms ,e.g. Health,
Education ,Forestry Reform of Subvented
Agencies
SOME REFLECTIONS
Serious Omission of Human Factor and Concerns
Shaky Development Assumptions
Mismatch of Costs and Benefits
Cross Border and Domestic Brain Drain
Unfair Wage Discrimination Against Citizens
Overview
REALIGNED STATEGY
Overview
Constraints
Frustrations
The Realignment
OVERVIEW•Reform impact negligible (World Bank Report No. 19004-GH refers).
•Details of Constraints and Frustrations follow.
Constraints Critical processes, e.g., policy design, coordination and implementation.
Core Systems, e.g., the rules governing the use of human and financial resources.
Structures, e.g., unclear mandates, responsibilities and operational objectives of public sector
Performance Orientation, e.g., Lack of performance-oriented management culture, and poor performance and motivation of public servants resulting in unsatisfactory quantity and quality of service delivery
Frustrations Fragmentation of change process
responsibilities coupled with
Weak coordination mechanism for the implementation process combined with
Unclear and possessive mandates of the “driving forces” of the change process with
Little experience with the implementation of major reform programmes with
Inadequate capacity (managerial, staff, administrative, technical) to manage and institutionalize the necessary changes and
Uncoordinated agenda leads to: workshop fatigue; apparent neglect of work for which staff are being paid; and further stress on and dislocation of already limited staff staff.
The RealignmentFormation And Operationalization Of Technical Advisory
Boards For Ministries. Civil Service Law 1993 PNDC Law 327
Public Sector Re-invention and Modernization Strategy for
Ghana: Transforming vision into Reality” (PUSERMOS). 1997
PUFMARP, Governance and Ghana Poverty Reduction
Strategy (GPRS)
Legislative action in pipeline: Financial Administration Bill,
Central Internal Audit Bill, Procurement Bill, etc.
New Approach:
Membership Functions•Sector Minister, Chairman
•Deputy Minister
•Chief Director (Permanent Secretary)
•Representatives from
i). three public sector organisations
ii). three private sector organisations
With which the Ministry
a)Promote constant interaction between
the Ministry and the users of its services and
b)Advise the Minister on adjustments in policy direction, planning objectives and operational strategies.
NOTE:Boards do NOT exist on the ground.Therefore, policies, programmes, etc. continue to be implemented without adequate transparency, consultation, consensus building, etc.
Ministerial Boards (PNDCL 327)
PUBLIC SECTOR RE-INVENTION AND MODERNIZATION STRATEGY FOR
GHANA:TRANSFORMING VISION INTO REALITY
Functions:
Approved by Cabinet in December 1997 as the framework for conducting Public Sector Reforms in Ghana. Framework:
• Provides for integrating, sequencing, and monitoring reforms.
• Addresses key weaknesses of the public sector.
NOTE: Chairman = Vice President of Ghana
Legislative Action in PipelineLegislative Action in Pipeline
Financial
Administration Bill
Central Internal
Audit Bill
Procurement Bill
Etc.,e.g., Company Law, Insolvency Law
Characteristics of Old and New Approaches
Earlier Approach Current ApproachBrush fire
Unstructured
Uncoordinated
Autocratic.
Governance Flavoured. E.g.
Planned,Participatory, Sector and Inter Sector Programming, Private Sector and Civil Society Involvement.
Structured
Holistic
Convergent
Internal Audit Neglect Internal Audit Neglect and Relevant and Relevant LegislationLegislation
S.M.C.D. 221 Section 48(3)
“The Auditor-General may assign any member of the Audit Service to act as
internal auditor for any body or organisation for the audit of the accounts
of which the Auditor-General is responsible.”
Document PurposeConstitution of the Republic of Ghana, 1992.
Financial Administration Bill 2002:
Section 45(1)
Section 45(2)
Audit Service Act 2000 Act 584
Deals with finance. No specific mention is made of internal audit. But specific mention is made of Statistical Service, the Auditor-General and the Audit Service.
Provides for external audit in accordance with Audit Service Act 2000 Act 584.
Provides for internal audit in accordance with the currently non-existent Central Internal Agency Law.
No specific mention is made of internal audit. Section 30 on Audit Implementation Committee provides a semblance of Audit Committee.
Other Relevant Legislation
Audit Service Decree 1972, N.R.C.D. 49 Section 8(3)
States: “The Auditor-General may assign any member of the Audit Service to act as internal auditor for any body or organization for the audit of the accounts of which the Auditor-General is responsible. “
Financial Administration Decree, 1979 S.M.C.D. 221
No specific mention is made of internal audit.
Other Relevant Legislation contd.
Consequences of Consequences of
Apparent NeglectApparent Neglect Ghana Education Service Scandal in the 1980s
Relegation to Controller And Accountant-General’s
Department.
Questionable mandate
Conflicts
Lack of control over ride
Duplication of functions
Nonexistence or non-performance
PUFMARP II Project Cost Allocation
National Budget
International Direction
Next Next
StepsSteps
PUFMARP II PROJ ECT COST ALLOCATION
Economic
Governance
(22.0)
Project M
gt
(6.4
)
Unallocated Funds &
Contingencies (3.8)
Revenue Agency
Reform (6
.4)
Additional Expt. Controls (2.8)
Furt
her
BPE
MS
Rol
l-out
(58.
6)
FURTHER BPEMS ROLL-OUT (58.6)
ADDITIONAL EXPT. CONTROLS (2.8)
REVENUE AGENCY REFORM (6.4)
ECON GOVERNANCE (22.0)
PROJECT MGT (6.4)
UNALLOCATED + CONTINGENCIES (3.8)
A national budget is a plan for economic governance and
controlled use of resources for the country .
National Budget
Budget Overview:What Did the Budget Intend to Achieve?
Macroeconomic
Framework
Five Development Priority Areas
President’s Special
Initiative (PSI)
Macroeconomic Framework
Keep inflation low and stable.
Accelerate the implementation of the prioritized GPRS programmes.
Work towards early implementation of HIPC completion point
Intensify rate of infra-structure development through public and private investment
Improve rev. collection and mgt.
Improve exp. mgt.
Reduce debt burden
Develop a more effective interbank foreign exchange rate
Five Development Priority Areas
Vigorous development
of infrastructure
Modernised agriculture based on rural development
Enhanced social services
Strengthening of Governance Institutions
Strengthening
Private Sector
President’s Special
Initiative (PSI)
Stimulate private
enterprise
Improve productivity
Create
jobs
International International DirectionDirection
Mission and Organisation Structure Information
Financial Information
Forward Looking Information
Governance Information
Performance Information
•Abortive ministerial initiative (1997)
•UNDP sponsored study (1999)
•Other developments
•Contract awarded 2001
Antecedents of Formal Recognition of Internal Auditing
TERMS OF REFERENCEReview documentation and consult stakeholders to develop
a full understanding of the issues and options;
Assess current internal auditing functions in MDAs and
MMDAs to determine their requirements;
Determine the most appropriate set-up arrangements and
structure;
Review options complying with international standards in
use in other countries;
Review internal auditing functions in selected countries
that comply with international auditing standards to draw
lessons for the Ghanaian situation;
Suggest realistic options on internal audit and financial control functions complying with international standards;
Determine technical assistance needs to operationlize the organizational set-up and include the provision of the operational requirements of the audit function;
Review existing legislation with a bearing on internal audit and recommend amendments where applicable and, if necessary, develop an internal audit legislative framework; and Develop capacity building programme.
TERMS OF REFERENCE contd.
• Report submission date 27 August Report submission date 27 August 20012001
• Activity commencement date Activity commencement date November 2001November 2001
• Completion of priority activities, e.g. Completion of priority activities, e.g. Implementation committee, Implementation committee, recruitment of key staff, enactment of recruitment of key staff, enactment of law, July 2002law, July 2002..
Progress AchievedProgress AchievedBill in ParliamentBill in Parliament
Milestones
CONCLUSIONWhither are we going? Knowing that our burdens are temporary enables us to bear them with a triumphant smile. Let us move forward with IA. Mindset and attitudinal change also required.
Ato Ghartey